September 25th, 2010
The Independent AU
The likely departure of the White House Chief of Staff, Rahm Emanuel, to run for Mayor of Chicago is part of a half-term reshuffle of top aides that will signal a new chapter in the history of Barack Obama's increasingly embattled presidency.
It also raises a vital question: will Mr Obama continue to rely on the small and trusted group of intimates who have followed him from Chicago to Washington – or will he seize the chance to bring in new blood from the outside to invigorate an administration high command that critics say has become insular and out of touch?
The official word at the White House remains that Mr Emanuel is still "in the process of thinking about what he's going to do next". Unofficially, it is virtually taken for granted he will leave. The filing deadline for the race to succeed the outgoing mayor, Richard Daley, is 22 November, and the Chicago Sun-Times reported yesterday that Terry Peterson, head of the city's transit authority, had signed up as Mr Emanuel's campaign manager.
Among the possible replacements as Chief of Staff (whose role is to take charge of the day-to-day running of the White House and advise the President) are Pete Rouse, a senior Obama adviser; Tim Kaine, the former governor of Virginia; and Tom Donilon, the deputy national security adviser to General James Jones. But Gen Jones, too, is said to want to leave by the end of the year.
Another impending departure is that of David Axelrod, a key adviser and architect of the 2008 campaign, who has been to President Obama something akin to what Karl Rove was to George W Bush. Mr Axelrod is also set to head to Chicago some time after the mid-term elections on 2 November, to plan President Obama's 2012 re-election bid. "I've been pretty clear ... that at some point, I'm going to go back and work on the re-election campaign," he said this week.
No less of an upheaval looms in the President's economic team. After two years as director of Mr Obama's National Economic Council, the abrasive Larry Summers is returning to his former professorship at Harvard, while Peter Orszag, the budget director, and Christina Romer, head of the Council of Economic Advisers, have already left. There are hiccups ahead in the wider government, too, with Defence Secretary Robert Gates signalling his intention to step down well before the President's term is complete.
Mr Obama is said to be keen for a woman to replace Mr Summers, and among the names mentioned are Anne Mulcahy, a former chairwoman of Xerox, and Laura D'Andrea Tyson, a top economic adviser at the Clinton White House.
However dramatic in appearance, such staff turnovers are anything but unusual at the White House, with its gruelling working hours, round-the-clock pressure and disruption of family life – not to mention all those large egos cooped up in a small space, and salaries that are often far below those in the private sector.
Andrew Card's stint of five and a half years under George Bush was very much the exception. Both Ronald Reagan and Bill Clinton got through four chiefs of staff in their eight years in office. George Bush Senior had three in his single four-year term.
Mr Emanuel, whose performance has won praise and blame in equal measure, made no secret of his ambivalence about taking the job when Mr Obama offered it days after his election victory in November 2008. Then a senior Democratic Congressman, he eventually accepted, but at the price of forfeiting a career on Capitol Hill that many believed would one day take him to the Speakership. More recently he has not concealed his interest in becoming mayor of his native Chicago, in the footsteps of the Daley dynasty.
The focus will now be on how Mr Obama remodels his team. Incoming presidents, from John F Kennedy and Jimmy Carter to Bill Clinton and George Bush, have relied, initially at least, on a small group of trusted advisers they have known for years. Mr Obama followed that pattern, with a "Chicago Mafia" consisting of people like Mr Axelrod, Valerie Jarrett and David Plouffe, his 2008 campaign manager.
But as the President's troubles have grown – his approval ratings have fallen from over 70 per cent in early 2009 to the mid-40s today, and his party faces heavy losses in November – so has criticism of the White House team among many Democrats.
Mr Obama himself is increasingly, if unfairly, described as over-analytical and short of empathy with ordinary Americans struggling to cope with the economic downturn. The looming staff shake-up may be his last opportunity to correct those impressions.
Exit Poll: The presidential aides on the way out
White House Chief of Staff
The President's chief enforcer has long hoped to be mayor of Chicago – and the timing might suit Obama, in particular if a chastening mid-term result dictates a more conciliatory approach to the Republicans.
After a lengthy period at the Pentagon, where he also served George W Bush, Gates has made it clear that he has no intention of seeing out Obama's first term. He is likely to delay his departure until 2011 given the other issues now on the President's plate.
Director of the National Economic Council
Although the announcement of his impending departure inevitably set tongues wagging, those closest to him insist it was because he did not want to lose his tenure at Harvard. Looming mid-terms may mean the President makes a consciously pro-business choice of replacement.
General James Jones
National Security Adviser
Once a key influence on the president's decision making on Afghanistan, he has since fallen out badly with Obama's closest advisers. Fallout from Bob Woodward's book detailing those relationships may only increase his rumoured anxiety to depart before the end of the year.
One of the most trusted aides from the campaign, Axelrod could depart the White House to begin work on a re-election bid. His departure as well as Emanuel's would transform the tight-knit cabal that surrounds Obama.
September 25th, 2010
September 25th, 2010
U.S. President Barack Obama and his administration weakened the country’s economy by seeking to foster growth instead of paying down the federal debt, said Nassim Nicholas Taleb, author of “The Black Swan.”
“Obama did exactly the opposite of what should have been done,” Taleb said yesterday in Montreal in a speech as part of Canada’s Salon Speakers series. “He surrounded himself with people who exacerbated the problem. You have a person who has cancer and instead of removing the cancer, you give him tranquilizers. When you give tranquilizers to a cancer patient, they feel better but the cancer gets worse.”
Today, Taleb said, “total debt is higher than it was in 2008 and unemployment is worse.”
Obama this month proposed a package of $180 billion in business tax breaks and infrastructure outlays to boost spending and job growth. That would come on top of the $814 billion stimulus measure enacted last year. The U.S. government’s total outstanding debt is about $13.5 trillion, according to U.S. Treasury Department figures.
Obama, 49, inherited what the National Bureau of Economic Research said this week was the deepest U.S. recession since the Great Depression. Even after the stimulus measure and other government actions, the U.S. unemployment rate is 9.6 percent.
Governments globally need to cut debt and avoid bailing out struggling companies because that’s the only way they can shield their economies from the negative consequences of erroneous budget forecasts, Taleb said.
“Today there is a dependency on people who have never been able to forecast anything,” Taleb said. “What kind of system is insulated from forecasting errors? A system where debts are low and companies are allowed to die young when they are fragile. Companies always end up dying one day anyway.”
Taleb, a native of Lebanon who gave his speech in French to an audience of Quebec business people, said Canada’s fiscal situation makes the country a safer investment than its southern neighbor.
Canada has the lowest ratio of net debt to gross domestic product among the Group of Seven industrialized countries and will keep that distinction until at least 2014, the country’s finance department said in March. Canada’s ratio, 24 percent in 2007, will rise to about 30 percent by 2014. The U.S. ratio, now above 40 percent, will top 80 percent in four years, the department said, citing IMF data.
“I am bullish on Canada,” he told the audience. “I prefer Canada to the U.S. or even Europe.”
Canada’s economy also benefits from the fact that homeowners, unlike their U.S. neighbors, can’t take mortgage interest as a tax deduction, Taleb said. That removes the incentive to take on too much debt, he said.
“The first thing to do if you want to solve the mortgage problem in the U.S. is to stop making these interest payments deductible,” he said. “Has someone dared to talk about this in Washington? No, because the U.S. homebuilders’ lobby is hyperactive and doesn’t want people to talk about this.”
Taleb also criticized banks and securities firms, saying they don’t adequately warn clients of the risks they run when they invest their retirement savings in the stock market.
“People should use financial markets to have fun, but not as a depository of value,” Taleb said. “Investors have been deceived. People were told that markets go up regularly, but if you look at the last 10 years that’s not been the case. The risks are always greater than what people are told.”
Asked by an audience member if returns such as those posted by Berkshire Hathaway Inc. Chief Executive Officer Warren Buffett -- who amassed the world’s third-biggest personal fortune through decades of stock picks and takeovers -- are the product of luck or talent, Taleb said both played a part.
If given a choice between investing with Buffett and billionaire investor George Soros, Taleb also said he would probably pick the latter.
“I am not saying Buffett isn’t as good as Soros,” he said. “I am saying that the probability Soros’s returns come from randomness is much smaller because he did almost everything: he bought currencies, he sold currencies, he did arbitrages. He made a lot more decisions. Buffett followed a strategy to buy companies that had a certain earnings profile, and it worked for him. There is a lot more luck involved in this strategy.”
Soros gained fame in the 1990s when he reportedly made $1 billion correctly betting against the British pound.
Taleb’s 2007 best-seller, “The Black Swan: The Impact of the Highly Improbable,” argues that history is littered with rare, high-impact events. The black-swan theory stems from the ancient misconception that all swans were white.
To contact the editor responsible for this story: David Scanlan at email@example.com
September 25th, 2010
Washington (CNN) -- The Department of Defense recently purchased and destroyed thousands of copies of an Army Reserve officer's memoir in an effort to safeguard state secrets, a spokeswoman said Saturday.
"DoD decided to purchase copies of the first printing because they contained information which could cause damage to national security," Pentagon spokeswoman Lt. Col. April Cunningham said.
In a statement to CNN, Cunningham said defense officials observed the September 20 destruction of about 9,500 copies of Army Reserve Lt. Col. Anthony Shaffer's new memoir "Operation Dark Heart."
Shaffer says he was notified Friday about the Pentagon's purchase.
"The whole premise smacks of retaliation," Shaffer told CNN on Saturday. "Someone buying 10,000 books to suppress a story in this digital age is ludicrous."
Shaffer's publisher, St. Martin's Press, released a second printing of the book that it said had incorporated some changes the government had sought "while redacting other text he (Shaffer) was told was classified."
From single words and names to entire paragraphs, blacked out lines appear throughout the book's 299 pages.
CNN obtained a memo from the Defense Intelligence Agency dated August 6 in which Lt. Gen. Ronald Burgess claims the DIA tried for nearly two months to get a copy of the manuscript. Burgess said the DIA's investigation "identified significant classified information, the release of which I have determined could reasonably be expected to cause serious damage to national security."
Burgess said the manuscript contained secret activities of the U.S. Special Operations Command, CIA and National Security Agency.
Shaffer's lawyer, Mark Zaid, said earlier this month that the book was reviewed by Shaffer's military superiors prior to publication.
"There was a green light from the Army Reserve Command," Zaid told CNN.
But intelligence agencies apparently raised objections when they received copies of the book.
The Pentagon contacted St. Martin's Press in early August to convey its concerns over the release of the book. According to the publisher, at that time the first printings were just about to be shipped from its warehouse. Shaffer said he and the publisher worked hard "to make sure nothing in the book would be detrimental to national security."
"When you look at what they took out (in the 2nd edition), it's lunacy," Shaffer said.
The Pentagon says Shaffer should have sought wider clearance for the memoir.
"He did clear it with Army Reserve but not with the larger Army and with Department of Defense," Department of Defense spokesman Col. David Lapan said earlier this month. "So he did not meet the requirements under Department of Defense regulations for security review."
One of the book's first lines reads, "Here I was in Afghanistan (redaction) My job: to run the Defense Intelligence Agency's operations out of (redaction) the hub for U.S. operations in country."
In chapter 15, titled "Tipping Point," 21 lines within the first two pages are blacked out.
In the memoir, Shaffer recalls his time in Afghanistan leading a black-ops team during the Bush administration. The Bronze Star medal recipient told CNN he believes the Bush administraton's biggest mistake during that time was misunderstanding the culture there.
Defense officials said they are in the process of reimbursing the publisher for the cost of the first printing and have not purchased copies of the redacted version.
At least one seller on the online auction site eBay claiming to have a first-edition printing is selling it for an asking price of nearly $2,000. The listed retail price for the second printing is $25.99.
September 25th, 2010